Correlation Between KS Terminals and Bright Led
Can any of the company-specific risk be diversified away by investing in both KS Terminals and Bright Led at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KS Terminals and Bright Led into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KS Terminals and Bright Led Electronics, you can compare the effects of market volatilities on KS Terminals and Bright Led and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KS Terminals with a short position of Bright Led. Check out your portfolio center. Please also check ongoing floating volatility patterns of KS Terminals and Bright Led.
Diversification Opportunities for KS Terminals and Bright Led
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 3003 and Bright is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding KS Terminals and Bright Led Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Led Electronics and KS Terminals is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KS Terminals are associated (or correlated) with Bright Led. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Led Electronics has no effect on the direction of KS Terminals i.e., KS Terminals and Bright Led go up and down completely randomly.
Pair Corralation between KS Terminals and Bright Led
Assuming the 90 days trading horizon KS Terminals is expected to under-perform the Bright Led. But the stock apears to be less risky and, when comparing its historical volatility, KS Terminals is 1.19 times less risky than Bright Led. The stock trades about -0.01 of its potential returns per unit of risk. The Bright Led Electronics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,265 in Bright Led Electronics on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Bright Led Electronics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KS Terminals vs. Bright Led Electronics
Performance |
| Timeline |
| KS Terminals |
| Bright Led Electronics |
KS Terminals and Bright Led Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KS Terminals and Bright Led
The main advantage of trading using opposite KS Terminals and Bright Led positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KS Terminals position performs unexpectedly, Bright Led can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bright Led will offset losses from the drop in Bright Led's long position.| KS Terminals vs. Yulon Motor Co | KS Terminals vs. Far Eastern Department | KS Terminals vs. China Steel Corp | KS Terminals vs. Chang Hwa Commercial |
| Bright Led vs. Everlight Electronics Co | Bright Led vs. Harvatek Corp | Bright Led vs. Optotech Corp | Bright Led vs. I Chiun Precision Industry |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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